Growing older brings new challenges — not only physical or emotional, but also financial. For many Australian families, planning for aged care is one of the biggest life transitions they’ll ever face. Questions about affordability, government funding, and the right type of care can quickly become overwhelming.
Yet, with knowledge and preparation, families can make informed choices that protect both comfort and independence. This guide explores how aged care costs work, how the Support at Home Program (starting 1 November 2025) will simplify access to government-funded care, and how Melbourne families can plan ahead with confidence.
Understanding the Changing Landscape of Aged Care in Australia
For decades, home care has been delivered through two main programs — the Commonwealth Home Support Program (CHSP) and Home Care Packages (HCP). While these systems have supported millions, they’ve also been criticised for their complexity and waiting times.
That’s why the Australian Government is launching the Support at Home Program, a new model designed to:
- Simplify access to funding
- Reduce administrative confusion
- Give older Australians more choice and control
This reform unites several existing systems into one streamlined program that focuses on personalised care budgets and flexibility. Instead of managing multiple programs or service levels, older Australians will have one tailored budget that evolves with their needs.
How the Support at Home Program Works
Under the new model, older Australians will undergo an assessment through My Aged Care to determine their care needs. Based on this assessment, they’ll receive an individualised funding budget that can be used for a wide range of services — including personal care, domestic help, transport, and allied health.
The Support at Home Program promotes:
- Flexibility: Adjusting services as needs change
- Transparency: Clearer pricing and provider accountability
- Accessibility: Faster approvals and digital tracking tools
It’s a major shift toward person-centred care, helping older people remain independent and safe in their own homes for as long as possible.
The Core Components of Aged Care Costs
Aged care in Australia — whether at home or in a residential setting — combines personal contributions with government subsidies. To plan effectively, families should understand the three main types of fees:
- Basic Daily Fees – for everyday living costs like meals, laundry, and cleaning
- Means-Tested Care Fees – based on income and assets
- Accommodation Payments – for those entering residential care
Each component serves a different purpose, and together they create a balanced funding model where those with greater means contribute more, while those with fewer resources receive stronger government support.
A.Basic Daily Fee
This covers general living expenses within aged care settings. For most participants, the Basic Daily Fee equals 77.86% of the standard Age Pension. It’s standardised nationwide and adjusted twice yearly to match pension increases.
In residential care, this fee is usually deducted automatically from the resident’s pension or paid monthly. For home care, it may be subtracted from the allocated budget.
B.Means-Tested Care Fee
This fee reflects your ability to contribute financially to your own care. It is calculated by Services Australia or the Department of Veterans’ Affairs based on:
- Income (pension, superannuation, investments)
- Assets (property, vehicles, savings)
- Marital status and living arrangements
Importantly, there are annual and lifetime caps, ensuring fairness so that no one pays beyond their means.
C.Accommodation Payments
When moving into residential aged care, residents may pay for their accommodation in one of three ways:
- Refundable Accommodation Deposit (RAD):
A lump-sum payment, refunded (less agreed deductions) when you leave the facility. - Daily Accommodation Payment (DAP):
A rental-style payment calculated daily using the government-set Maximum Permissible Interest Rate (MPIR). - Combination of RAD and DAP:
Offering flexibility between upfront and ongoing payments.
All facilities must publish their RAD prices on My Aged Care, allowing families to compare options transparently.
D.Optional or Extra Service Fees
Some aged care homes provide additional lifestyle benefits — such as premium dining, private entertainment, or wellness activities — for an added cost. These are not subsidised and should be clearly detailed in the service agreement before signing.
How the Family Home Impacts Aged Care Costs
The family home holds both sentimental and financial significance, often becoming a central topic in aged care planning. Many families believe selling is mandatory to fund care — but that’s not always true.
When Your Home Is Exempt
If your spouse, partner, or dependent continues to live in the property, the home is classed as a protected asset and excluded from the means test.
It may also remain exempt if a close relative or carer who has lived with you for at least two years continues residing there.
When Your Home Is Counted
If you move into care and no protected person remains, the home may be partially included in the assessment, capped at $210,555.20 (as of 2025). This value is reviewed annually.
Two-Year Pension Exemption
Under pension rules, your home is exempt from the assets test for two years after entering care. This grace period allows families to make informed financial decisions before selling or renting.
Should You Sell Your Home to Pay for Care?
The decision to sell a home is deeply personal and financially complex. It depends on your care needs, available income, and long-term goals.
Here are important factors to consider before deciding:
- Who is living in the home?
If your spouse remains, the property stays exempt. - How will selling affect your pension?
Sale proceeds count as financial assets and may reduce your pension. - Could renting be an alternative?
Renting can provide income while keeping ownership intact. - Have you sought financial advice?
Speaking with an accredited aged care financial planner ensures you understand all tax and Centrelink implications.
For many families, the best approach involves balancing liquidity and emotional value — maintaining stability while covering care expenses.
The Financial Framework Behind the Support at Home Program
The Support at Home Program replaces multiple systems with a single, adaptable model designed for clarity and fairness.
Participants contribute to their support through:
- A Basic Fee, similar to the current daily contribution
- A Means-Tested Co-contribution, based on income and assets
- Additional top-ups for specific needs like rehabilitation or mobility aids
The remainder of the cost is subsidised by the government.
Each person’s individualised budget can be used for:
- Personal care (showering, grooming, dressing)
- Domestic help (cleaning, laundry, meal preparation)
- Home maintenance and safety modifications
- Transport to medical and community appointments
- Allied health services (physiotherapy, podiatry, speech therapy)
This model empowers older Australians to adjust their support as circumstances evolve — reducing paperwork and improving service flexibility.
Alternative Funding Options and Supplements
Beyond the Support at Home Program, several complementary options can assist older Australians with specific health or financial needs:
- Chronic Disease Management (CDM) Plan:
Access up to five Medicare-subsidised allied health sessions annually through your GP. - Veteran Gold Card:
Full coverage for eligible veterans and dependents for medical and allied health services. - Equity Release or Reverse Mortgage:
Unlock home equity to fund care without selling the property outright — though this should only be considered with professional advice.
Together, these supports ensure no one is left without options, regardless of their income or circumstance.
Planning Ahead: Financial and Emotional Preparation
Aged care is as much an emotional journey as it is a financial one. Conversations about care should begin early — before a crisis forces rushed decisions.
Practical steps for families include:
- Gather key documents: pensions, superannuation, bank accounts, and assets.
- Discuss care preferences and wishes openly.
- Schedule an Aged Care Assessment through My Aged Care.
- Compare provider offerings and costs early.
- Create a preliminary budget using government fee estimators.
Families who plan ahead often find the process less stressful and more empowering for everyone involved.
Common Myths About Aged Care Costs
Myth 1: Everyone has to sell their home to pay for care.
❌ Not true — exemptions exist for spouses and protected residents.
Myth 2: The government covers all costs.
❌ Most people contribute something based on means testing.
Myth 3: You can’t choose your provider.
❌ Under both current and future systems, choice and control remain central.
Myth 4: All aged care homes cost the same.
❌ Fees vary by location, service quality, and accommodation standards.
Myth 5: Planning is only needed during a crisis.
❌ Early planning provides more financial flexibility and peace of mind.
What the 2025 Reform Means for Families
The upcoming Support at Home Program represents one of the largest overhauls of aged care in decades. It introduces:
- Simpler funding with one unified model
- Faster approvals and reduced waiting times
- Transparent pricing across all providers
- Better integration with healthcare and allied services
Existing Home Care Package recipients will transition automatically, with protections to ensure continuity of service and no sudden fee increases.
For new applicants, the process will be more efficient and user-friendly, supported by clearer online tools and digital budgeting features.
Building a Sustainable Plan for the Future
Creating a sustainable aged care plan means more than covering today’s costs — it’s about protecting tomorrow’s wellbeing.
Consider the following principles:
- Plan finances early and update them annually.
- Stay informed about aged care reforms.
- Encourage open communication within the family.
- Seek professional advice for complex financial or legal situations.
- Focus on wellbeing, not just funding.
By preparing thoughtfully, older Australians can age with dignity and choice — supported by systems designed for their independence.
The Role of Expert Guidance
Even with reforms that simplify funding, navigating the aged care system can be daunting. From understanding assessments to comparing provider contracts, professional guidance saves families both time and stress.
That’s where Support Services Connect Australia (SSCA) helps.
With over 25 years of experience in the Australian aged care sector, SSCA offers a free care finding service that matches older Australians with suitable, government-approved providers.
Through careful consideration of personal needs, preferences, and budget, SSCA ensures that families make confident, informed decisions.
Conclusion: Planning Today for a Confident Tomorrow
Preparing for aged care isn’t just about managing costs — it’s about preserving independence, dignity, and peace of mind.
The introduction of the Support at Home Program marks a new era for older Australians, one where flexibility, transparency, and fairness define every stage of the care journey.
And while navigating this landscape can be complex, families don’t have to do it alone.
Support Services Connect Australia (SSCA) is here to help you make sense of your options, compare trusted providers, and find the right care pathway — at no cost.
So you can focus on what truly matters: ensuring your loved one receives the care, respect, and quality of life they deserve.